Mail Stop 3561
December 16, 2005
Hugo M. Cancio, Chief Executive Officer
Fuego Entertainment, Inc.
19250 NW 89th Court
Miami, Florida 33018
Re: Fuego Entertainment, Inc.
Amendment No. 4 to Registration Statement on Form SB-2
Filed November 22, 2005
Amendment No. 5 to Registration Statement on Form SB-2
Filed November 29, 2005
File Nos. 333-127612
Dear Mr. Cancio:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments. The
page numbers referred to in this letter correspond to the page
numbers in the marked copy of Amendment No. 5 to the Form SB-2
registration statement you filed on EDGAR on November 29, 2005.
Management`s Discussion and Analysis, page 12
Plan of Operation, page 12
1. We note your response to comment 6 in our letter dated October
27,
2005. We reissue that part of our comment asking you to quantify
and
describe specific significant costs and expenses incurred thus far
and that you expect to incur in the next 12 months. In this
regard,
we note that in the fourth full paragraph on page 15, you state
that
you will need approximately $250,000 for the next 12 months.
Please
also discuss the impact on your business if you fail to raise the
required amount.
2. We note that you are seeking licensing agreements with Tota
Productions and others. Please describe the business operations
of
Tota Productions.
3. In the third paragraph on page 13, you state that you engage in
projects in which you will act as an agent and contract
organization
to earn additional revenue that "may include" certain services you
list. Please describe any current projects, or state that you do
not
currently have any agreements or projects to act as an agent.
4. In the fourth paragraph on page 13, you state that delays in
release or securing a major distributor represent a financial
uncertainty, which is a risk for you. If material, please
consider
including this risk as a risk factor in your Risk Factors section.
5. We reissue comment 7 in our letter dated October 27, 2005. In
the
second paragraph on page 13, you state that you are producing
three
documentaries and developing a reality show. For each of these
projects, please disclose the development costs to date, any
additional expenses you expect to incur, and the revenues
generated
to date.
6. We note that you have invested $57,000 in the Havana Nights
Club,
Celebrate Freedom Tour and expect to recoup your investment and
"generate substantial revenues" from the shows. Please quantify
the
revenues to date or state that you have not generated any revenues
from the tour.
For the Period from December 30, 2004 (Inception) to May 31, 2005,
page 16
7. We note your response to comment 11 in our letter dated October
27, 2005. In the first paragraph of this sub-section, you state
that
you received $82,856 from operating activities and $37,925 from
financing activities, less $113,302 applied to investing
activities.
Please disclose the operating activities that earned you the
$82,856
and the financing activities that earned you the $37,925. Also,
please disclose the investing activities that cost you $113,302.
8. We note that you state that "there were no major expenses
incurred
in filming any of the three videos." Please revise to quantify
the
expenses and revenues for each video. Please also define NHRA.
Form the Period from June 1, 2005 to August 31, 2005, page 17
9. Please disclose the work for hire projects that have continued
to
generate revenues for you.
10. Please disclose the loss you earned for this period.
Description of Business, page 19
Projects, page 21
11. We note your response to comment 24 in our letter dated
October
27, 2005. Based upon your size, please tell us why it is
appropriate
for you to state that you would like to be able to compete
successfully with "other reality shows such as `The Apprentice.`"
Financial Statements, page 34
Note 2. Significant Accounting Policies, page 39
Investment, page 40
12. We note your response to comment 32 in our letter dated
October
27, 2005. Your response states repayment of your investment has
been
deferred until future shows are performed and that you will also
participate thereafter in the sales of additional shows. Please
expand your disclosure to clearly state the terms of the
renegotiated
agreement. Include, but do not limit your revised disclosure, to
the
following information:
* State the date of when the investment is expected to be repaid
and
how many shows must be performed prior to the repayment. If the
renegotiated agreement states you will be repaid in installments
based on a percentage of ticket sales after the eighth show,
clarify
that fact.
* Disclose what event or trigger is necessary for you to
participate
in the shows after repayment of your investment. In this regard,
indicate, if true, that you will participate after the initial
show
in each of the next five cities.
* Disclose the percentage interest in additional shows specifying
whether you will participate in the net income as originally
agreed.
Part II - Information Not Required In Prospectus, page 46
Recent Sales of Unregistered Securities, page 48
13. We reissue comment 38 in our letter dated October 27, 2005, in
part. Your balance sheet and statement of stockholders` equity
reflects 13,272,670 common shares issued and outstanding as of May
31, 2005. We also note the table of unregistered security sales
discloses 29,025,200 issued and outstanding as of January 2, 2005,
including 19 million shares issued to Hugo M. Cancio. This
tabular
information does not reconcile with both the financial statements
and
the table on page 26. Please advise or revise your unregistered
security sales to reconcile with the information in your financial
statements and disclosures.
Also, in your table, please disclose the date for each particular
sale of your unregistered securities and the consideration each
purchaser gave you for the shares.
Undertakings, page 51
14. We note your response to comment 39 in our letter dated
October
27, 2005. Please include the additional undertakings required by
Item 512(a)(4) of Regulation S-B.
* * * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
You may contact Brian McAllister, Staff Accountant, at (202)
551-3341, or Donna DiSilvio, Senior Accountant, at (202) 551-3202,
if
you have questions regarding comments on the financial statements
and
related matters. Please contact John Fieldsend, Staff Attorney,
at
(202) 551-3343, Peggy Kim, Senior Attorney, at (202) 551-4504, or
me
at (202) 551-3720 with any other questions.
Sincerely,
H. Christopher Owings
Assistant Director
cc: William D. O`Neal, Esq.
The O`Neal Law Firm, P.C.
Via Fax: (480) 816-9241
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Hugo M. Cancio, Chief Executive Officer
Fuego Entertainment, Inc.
December 16, 2005
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